Personal Finance

HSBC GIC redeemable vs non redeemable

  • Last Updated:
  • May 25th, 2019 5:05 am
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[OP]
Deal Fanatic
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Jul 17, 2008
9081 posts
2102 upvotes

HSBC GIC redeemable vs non redeemable

Question about HSBC GIC for anyone who has experience dealing with them.

Their GIC rate for short term 90 day says it's 1.25%. But the redeemable is 1.45%, as long as it keep the fund more than 90 days.

So, wouldn't I be ahead getting a redeemable and just redeem it after 90 days (or longer) and get more interest than just getting a short term non redeemable?

The short term non redeemable rate is less than 1.45% unless I go for a full year.

So am I correct in saying that it's better to get the redeemable option for 12 months at 1.45%? It seems that after 90 days I will get the equivalent of 1.45% on the amount when I'm ready to claim (7 months or if a rate comes better)

For anyone not aware, this is in regards to the $5000 I have to keep for 15 months for their promo. Right now I'm 7 months left.
4 replies
Jr. Member
Jan 21, 2018
158 posts
84 upvotes
Vancouver
Why would you lock your money in at all at those ridiculously low rates? Transfer it elsewhere to get a better rate even with daily interest. Then if you really like HSBC that much, you can transfer it back because they are paying 3% daily interest on "new money" right now.
[OP]
Deal Fanatic
User avatar
Jul 17, 2008
9081 posts
2102 upvotes
Because like I said, I'm stuck with $5000 with HSBC until end of the year due to their $500 promo.
Newbie
May 2, 2019
33 posts
7 upvotes
It does appear you'd be ahead by almost $6, yay. ($5000 x 0.2% interest differential x 7/12 months). To be fair, a bit more due to the odd term.

Perhaps they tried to stay somewhat competitive but their system is lacking sophistication to use a tiered interest on early redemption. Btw, I see different rates on their website: 1.15% redeemable and 0.95% for 90-day non-redeemable GICs.
Deal Addict
Mar 8, 2013
2310 posts
1072 upvotes
yvrbanker wrote:
May 25th, 2019 1:47 am
It does appear you'd be ahead by almost $6, yay. ($5000 x 0.2% interest differential x 7/12 months). To be fair, a bit more due to the odd term.

Perhaps they tried to stay somewhat competitive but their system is lacking sophistication to use a tiered interest on early redemption. Btw, I see different rates on their website: 1.15% redeemable and 0.95% for 90-day non-redeemable GICs.
They lowered their rates, but the unusual differential still exists. It is clearly better to get the higher rate PLUS the flexibility of redeeming early in either 2019 or 2020 depending on your tax situation.

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